KL Gold Identifies Lantern Gold Deposit at Cosmo Mine

Kirkland Lake Gold Ltd. ("KL Gold" or the "Company") (TSX:KL)(OTCQX:KLGDF) is pleased to report the discovery of the Lantern Gold Deposit within the Company's Northern Territory ("NT") Operations, at its Cosmo Mine ("Cosmo"), from underground exploration drilling. The results released today from 25 diamond drill holes (totaling 5,973m), are part of the Cosmo Mine exploration program, specifically targeted to test down-plunge extensions of the Cosmo Open Pit (Figures 1 & 2).

Highlights and Key Drill Intercepts at the Cosmo Mine from the Newly Discovered Lantern Gold Deposit

• Discovery of the Lantern Gold Deposit has returned significant drill intercepts near existing underground infrastructure including:
  • 119 g/t Au ⁽¹⁾ over 4.5m (ETW 4.0m), including 521 g/t Au⁽¹⁾ over 1.0m (ETW 0.9m) in hole CW93515
  • 15.27 g/t Au ⁽¹⁾ over 11.1m (ETW 7.0m), including 29.7 g/t Au ⁽¹⁾ over 5.2m (ETW 3.1m), and 23.87 g/t Au over 5.4m (ETW 2.9m), including 125 g/t Au ^{(1) (2)} over 0.8m (ETW 0.4m) in hole CW101012
  • 4.34 g/t Au ⁽¹⁾ over 22.75m (ETW 11.3m) in hole CW101002⁽²⁾
  • 4.23 g/t Au over 16.6m (ETW 9.8m) in hole CW101010
  • 9.64 g/t Au ⁽¹⁾ over 6.0m (ETW 3.85m) in hole CW101006
  • 14.57 g/t Au ⁽¹⁾ over 2.8m (ETW 2.2m) in hole CW101013
     
• Continued drilling of further down-plunge extensions of the Lantern Deposit are to be tested over the next six months in aggressive step-out exploration programs including Scoping and Resource Definition drilling programs and construction of underground development to access the Lantern Deposit.
   

Mr. Tony Makuch, President and Chief Executive Officer, KL Gold commented: "The success of the 2016 exploration program at the Cosmo Mine, in particular, the Lantern Deposit discovery, has significantly enhanced the potential of the operation. To date, over 800,000 ounces has been mined from Cosmo's open pit and underground operations. We are excited with the recent discovery of the Lantern Deposit, located parallel to the Cosmo underground gold mineralization, as it illustrates significant potential to expand resources and become a new near term mining front under the open pit. The Lantern Deposit is located within 100 metres of underground infrastructure and remains open for expansion along strike and down plunge. These successful exploration results demonstrate the discovery and expansion potential of the Cosmo gold camp and we intend to follow up on additional high priority targets in the area."

Lantern mineralization is hosted within iron-rich siltstones in two distinct styles; linear lodes sub-parallel to the structures and local stratigraphy, and in more complex axial planar hinge-zones (Figure 3). Detailed core logging and geological modelling based upon pit mapping has delineated three broad litho-structural domains. Six mineralized lodes make up the deposit, which is presently defined over a strike length of 100m and a vertical extent of 160m. The six mineralized lodes are untested by drilling up and down-plunge and there is strong potential to expand the previously known extensions of the lodes with further exploration drilling (Figure 4-9).

Geology and Mineralization of the Lantern Gold Deposit

The Lantern host sequence encompasses sedimentary rocks enclosed between the Zamu and Phantom Dolerite sills and was previously referred to as the Inner Meta-sediment sequence (Figure 3). The Lantern Sequence differs from the Cosmo Mine Sequence largely due to the absence of carbonaceous mudstone and an increase in carbonate (dolomite) facies rocks.

Mineralization of the Lantern Deposit is generally hosted within fine grained, iron-rich siltstones and to a lesser extent in silica nodular greywacke units. The high-gold grades seen, up to 170 g/t Au over 1m in hole CW101003 (see News Release July 22, 2015), are usually found in veins with the higher-grade veins occurring as quartz-chlorite-pyrite mineral assemblages that can contain a substantially higher amount of coarse visible gold than is typical in the Cosmo Deposit. These veins often crosscut the folded strata at high angles or are sub-parallel to axial planes of parasitic folds.

Three different mineralization types are noted in Lantern Deposit, the first is a set of linear stratabound lodes, which are close to the Zamu Dolerite unit fold limbs. Examples of this are the Hornet and Adder lodes. The second type of mineralization is termed the "A Lodes", which are closely associated with vertical faulting related to localized folded structures and are adjacent to barren banded siltstone and ironstone breccias. This type of mineralization is typically found in the central part of the Lantern Deposit. The third mineralization type is termed the "W Lodes" which are generally the highest-grade lodes. These occur as open folded, banded silica-chloric-ironstone beds in close proximity to steeply westerly dipping faults.

Company geologists, using both historic surface and recent underground drill data from within and around the Cosmo Deposit and past open pit mapping have recently completed geological and mineralization wireframe models. A total of 135 holes comprising 91 Reverse Circulation Percussion and 44 diamond core holes were used in the wireframing process. Extensive logging of lithological and structural feature in drill core was completed and this information will be used during resource estimation of the Lantern Deposit. The modeling results will be included in the Mineral Resource statement due to be released in late Q1, 2017 (Figures 4-9).

To view a PDF of the tables and figures as referenced in this News Release, please visit the following links:

http://media3.marketwire.com/docs/1087904_figures.pdf

http://media3.marketwire.com/docs/1087904_tables.pdf

Qualified Persons

Mark Edwards, FAusIMM (CP) and MAIG, Geology Manager, NT Operations, is a "qualified person" as such term is defined in National Instrument 43-101 and has reviewed and approved the technical information and data included in this News Release.